India central bank intervenes to support dollar

Jul 27, 2011 |

New Delhi

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India's central bank is believed to have intervened in the foreign-exchange market on Wednesday to support the dollar against the rupee, Dow Jones Newswires reported, quoting traders.

The reported move follows several suspected interventions by central banks in Asia on Tuesday to brake a global fall in the dollar as the risk of US default grows because of political deadlock in Washington over the country's debt ceiling.

The Reserve Bank of India (RBI) is believed to have bought the dollar at around Rs43.85 to the US currency, according to three traders quoted by Dow Jones, who asked not to be named.

The size of the intervention was not immediately clear, the news agency said.

But one of the traders said the Reserve Bank was likely to have bought at least $200 million to help reduce the rupee's volatility after the currency approached a 35-month high against the dollar earlier in the trading session.

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